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August 3, 2007
First NLC is laying off almost half its employees as the vice tightens on the subprime lending market.
The Boca Raton-based company said 640 employees, 120 of them at the home office, were told of the layoffs Wednesday, less than a week after Sun Capital Partners agreed to buy a majority stake in the company for $60 million.
"The subprime industry is in a tremendous downturn," said Andrew Henschel, vice president of corporate governance at First NLC. "We have had to make this unfortunate move to ensure the future success of the company."
Henschel said he does not anticipate any more layoffs, and that the company plans to "vigorously compete" in the market.
He also said things could have been worse.
"We were able to save 700 jobs," Henschel said.
Henschel would not go as far as to say First NLC would be finished without the Sun Capital deal, but said that, without it, "we'd definitely be looking for capital. We feel very fortunate to be able to partner again with Sun Capital."
Rumors are swirling through the financial markets as lawsuits, slowdowns, shutdowns and layoff woes spread within the mortgage industry.
Melville, N.Y.-based American Home Mortgage Investment Corp. has closed most of its mortgage operations and plans to immediately lay off 7,000 employees, according to Chief Executive Officer Michael Strauss.
The company and its underwriter, Citigroup Global Markets, are the targets of a class action suit filed July 31 by the Boca Raton law firm of Vianale and Vianale. The suit charges American Home Mortgage Investment Corp and Citigroup Global Markets with federal securities law violations in connection with a 4 million-share secondary public offering on May 4.
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